Bauxite and politics

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The other side to Bauxite mining in west Rennell that is not talked about

By Alfred Sasako

OUTSPOKEN politician, Matthew Wale, last week called for a stop to the bauxite mining operations on West Rennell, claiming the Ministry of Mines, Energy and Rural Electrification has failed the people of Renbel Province.

Among other things, the Aoke-Langalanga MP claimed, based on disclosures by officials that the Ministry had no way of knowing what the country would get in terms of financial benefits from bauxite exports.

Officials allegedly told a recent Public Accounts Committee hearing that the Ministry does not have a formula to calculate such benefits.

An investigation by Alfred Sasako found otherwise. Mining is the only industry that keeps the employment pulse of the country pumping. To close down the mining operations there, would be to deny many people jobs that are hard to come by today.

Here is Alfred’s report.

Newly completed church building for West Rennell communities.

Bintan Mining (SI) Ltd holds the exclusive contract to mine pockets of bauxite deposits found on West Rennell under a Mining Licence held by Asia Pacific Investment Development (APID).

Those spoken to both in and outside government say BMSI strictly adheres to the terms and condition stipulated in the Mining Licence. These conditions include regular reporting. As a matter of fact, BMSI submits a monthly report to the Ministry of Mines, Energy and Rural Electrification.

Among other things, the report covers the amount of tonnage of bauxite exported each month, volume of shipment, import duty paid to the government as well as royalty payment made by Bintan Mining (SI) Ltd to resource-owners.

The company exports three shipments a month.

A new basket ball court the company was also built for the community.

To suggest that the Ministry does not have a formula in calculating monetary benefits from bauxite sales is not only wild but far-fetched. The Ministry is aware of mechanisms being deployed to calculate what the government gets in terms of taxes and other charges.

The same mechanism is used in calculating resource-owners’ benefits in the form of royalty.

Since Bintan Mining (SI) Ltd, BMSI for short, set foot on West Rennell in 2014, the company has injected tens or may even be hundreds of millions of dollars into government coffers, landowners’ bank accounts as well as support for civic activities in West Rennell.

Payments to the government are based on the going price of bauxite on the world market. Over-supply of bauxite also affects price as it eats into returns on the company’s investments.

It is not just the price fluctuations on the world market that BMSI faces. Marketing the stuff is also a tough challenge.

For example, BMSI first approached India about buying Solomon Islands’ bauxite a year ago. In response, India requested a trial shipment, which was sent. But thereafter the Indian company sent a written “regret” to discontinue the arrangement claiming Solomon Islands’ bauxite was not of the top quality standard.

The story is the same with Indonesia and Russia.

Inside the 800,000 dollar church building built by Bintan Mining(SI) Ltd.

Russia, which through Rusal boasts of hosting the largest bauxite smelter in the world only went as far as asking for a sample but that was it.

Today, China is the only market for Solomon Islands’ bauxite. It is the only market that BMSI has focussed on since setting up shop here.

“Making Solomon Islands’ bauxite saleable in the international market is BMSI’s biggest challenge,” I was told this week.

The accusation that there was no system in place for calculating price and so on was also strongly rejected.

“It is not true that there’s no system in place. The company reports to the Ministry of Mines, Energy and Rural Electrification on its activities on the ground on a monthly basis,” I was told.

In terms of community support, BMSI has made sure the landowners of West Rennell are happy. Since its operations began it has invested hundreds of thousands of dollars on community-based support.

For example, BMSI has built a new church building for the people there at an estimated cost of $800,000. Among other things, it has also built a basketball court, provided an OBM and boat as well as sponsored Renbel Province’s Rugby Team.

The company has and continues to work very, very hard with all its stakeholders to ensure steps taken in addressing any outstanding issues are mutual.

Bintan Mining (SI) Ltd does not want to be put on the spotlight in terms of speaking publicly about its work in West Rennell.

But one official could not hold back explaining the company’s resolve.

“We are here to stay and we will,” the man who wants to remain anonymous told me.

Like it not, the moment BMSI closes up shop here, many people would be without jobs. Over the years, mining is the only industry that keeps the employment pulse alive.

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